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Schad Commodity Blog & Commentary
This commentary is intended to provide unique insights with my 30+ years experience for the commodity crypto & futures markets we use in our everyday lives and is recognized, and has been selected, by Feedspot as one of the the Top 20 Futures Trading Blogs on the web. Schad Commodity views & opinion only. For additional commentary, and to assure you’re receiving the Schad Commodity Daily Report, be sure to connect on Facebook® & Twitter®.
From the desk of Brian Schad:
Schad Commodity’s Weekend Report: An Insider’s View of the Next Big Market Move
Once each week, usually on Friday evenings, we update our personal weekly commodity trading charts and review them for changes in “net long” or, “net short” holdings between the big commercial commodity traders, large speculators, and the usually uninformed public. This is our professional analysis of “the bigger picture” and current dynamics for each market which provide a spyglass view of the BIG commercial traders and what they are currently doing to influence the futures markets.
As you may already know, insider trading with stocks on Wall Street is very illegal. However, in the commodity trading industry, large/commercial traders MUST report their positions EACH WEEK to the CFTC regulatory body, hence, we monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts we’ve identified, serve to forewarn us of the next possible bigger move.
Here are the commodity markets which illustrate the changing bigger picture for them:
UP Trending Futures Markets: Crude Oil, Feeder Cattle, High-Grade Copper, Soy Oil & Euro-currency
DOWN Trending Futures Markets: Coffee, Corn, Soymeal & Soybeans (New this week.)
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Copper Futures Higher on Chinese Stimulus Outlook
Copper futures are beginning their rebound today from three-week lows on the outlook that weak Chinese factory activity may prompt the national government to introduce new stimulus measures to turn things around. Copper futures ended Thursday up 225 points at $2.8515 per pound at New York’s Commodity Exchange.
Interestingly it was data released by a popular bank’s “purchasing manager’s” index that revealed China’s data only inched-up by two-tenths of a point (to “49.1”) which missed expectations for better growth and below the benchmark level of “50” which would indicate growth in activity rather than contraction. China is the world’s largest copper consumer and used nearly 40% of copper resources just last year.
“Let’s see if the Chinese national bankers continue to lower interest-rates for a fourth time to boost confidence and growth,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the fundamental assessment of the copper futures market. Levy added, “They have been active in doing this since last November and this is what copper (futures) traders are probably looking for.”
The trend for copper futures is up and there is no topping action yet in sight. I suspect the Chinese interest-rate cuts have helped prompt this market higher since its January lows.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Planting Progress Sends Soybean Futures to Seven-Month Low
Soybean futures have extended their lows today to prices not seen since October as signs of rapid soybean planting progress is taking place across the Midwest last week. Soybean futures are down .04 cents today currently trading near $9.42 per bushel at the Chicago Board of Trade.
The USDA has reported nearly 45% of the domestic crop being planted as of this past weekend, which is up a whopping 31% from the week prior. At this same time last year, coincidently nearly 31% was planted. The five-year average is “36%” so you can see we’re well above this too.
“Being well ahead in planting with favorable weather is what the soybean traders are most likely seeing,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the fundamental assessment of the soybean futures market. Brady added, “Add these circumstances with plentiful stocks and it will take much export demand to turn the soybean (futures) market around.”
Soybean futures trend has resumed down after much sideways trading for the better part of the past two-and-a-half months. I will need some type of pull-back higher before I can enter the short side of this market…
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Cattle Futures Just Off Highs of the Year
Feeder cattle futures have been hovering at these levels for the better part of this month, but are having difficulty following through above $2.20 per pound let alone come close to challenging last year’s highs. The August feeder cattle contract closed down 120 points at $2.17 per pound at the Chicago Mercantile Exchange.
Feeder cattle “asking” prices have been reported to range nearly $100 per hundred-weight depending on what part of the country you’re in, but at the CME they have only been fluctuating between $2-$3 dollars in the past five weeks. Cattle futures may have picked up in the number of slaughtered animals this week, but is still well behind the pace of this time last year.
“Cattle futures are definitely at a cross-roads at this point,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, regarding the fundamental assessment of the cattle futures market. Medina added, “Cattle futures appear to have marked a double-top for the year in both January & April, and are showing weakness in challenging these highs – the way I see it.”
The trend in cattle futures is up, albeit with little follow-through on higher highs three times this month. The cattle futures market has been teetering back and forth for the past two months and I’m sidelined from this market until a clearer picture emerges.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Schad Commodity’s Weekend Report: An Insider’s View of the Next Big Market Move
Once each week, usually on Friday evenings, we update our personal weekly commodity trading charts and review them for changes in “net long” or, “net short” holdings between the big commercial commodity traders, large speculators, and the usually uninformed public. This is our professional analysis of “the bigger picture” and current dynamics for each market which provide a spyglass view of the BIG commercial traders and what they are currently doing to influence the futures markets.
As you may already know, insider trading with stocks on Wall Street is very illegal. However, in the commodity trading industry, large/commercial traders MUST report their positions EACH WEEK to the CFTC regulatory body, hence, we monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts we’ve identified, serve to forewarn us of the next possible bigger move.
Here are the commodity markets which illustrate the changing bigger picture for them:
UP Trending Futures Markets: Cotton, Crude Oil, Feeder Cattle, High-Grade Copper, British Pound, Soy Oil & Euro-currency (New this week.)
DOWN Trending Futures Markets: Coffee, Corn and Soymeal
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Butter Prices On the Rise (Again…)
Butter prices are said to be rising substantially for two-fold reasons: a demand for milk-fat, and a recent drop in production. So what is going on with the domestic butter market that hasn’t seen these high $2 per pound butter prices since November?
California dairy farmers are the nation’s top producers of butter and they have been reportedly struggling with lower profit margins since last year which has caused a 1.5% reduction (that’s 8.8M pounds!) in butter production. In other parts of the nation the dairy-milk supply appears to being devoted toward the making of cheese – at the expense of the consumers of butter.
“With CME spot butter prices now over the $2/lbs level, it might make more sense for dairy producers to reconsider how they allocate their product,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the fundamental assessment of the CME spot-butter market. Craney added, “It wouldn’t be surprising to see more milk headed toward the churn at this point, rather than the cheese vat.”
The Chicago Mercantile Exchange’s spot butter prices – according to my study – are clearly in an uptrend. Before butter prices get too crazy I’m confident the dairy producers will see the profit margin potential to step up production once again. At least from a business prospective this makes sense.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Plantings Nearly Complete and Emerging Weigh on Wheat Futures
Wheat futures are testing last weeks lows one day after the release of the USDA crop production report and earlier reports of domestic spring wheat planting near completion. Wheat futures are currently down .08 cents today near $4.725 cents per bushel at the Chicago Board of Trade.
A total of six states where 99% of the 2014 spring wheat crop domestic crop was planted are now reporting near completion and well above their five-year average for plantings. The five-year average of 51% of the spring wheat crop planted is being surpassed and currently at “87%” as of May 10th reporting.
“With spring wheat near completion so early its no surprise to learn a 54% ‘emerging’ so soon in the season,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, regarding the fundamental assessment of the spring wheat futures market. Plotkin added, “With favorable weather forecasted, wheat farmers are adding more supply to plentiful stocks.”
The trend for wheat futures continues to be down with the market currently testing the May 5th low. With no bullish news in sight, it will be interesting to see how wheat negotiates heavy support .12 cents lower.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Cotton Futures Find Two-Week Low Despite Planting Lag
Cotton futures have plummeted to two week lows and are more than 350 points from their early month highs despite USDA reports of cotton planting behind their five-year average. Cotton futures fell another 75 points today to $0.6464 cents per pound at the New York division of the Intercontinental Exchange.
There are 15 states where 99% of the 2014 cotton crop was planted and some states such as Arizona, Arkansas, and Mississippi are well above the five-year average for plantings. Even when these states are averaged with the other 12 states, the five-year average of 32% of the cotton crop planted is only sitting at “26%” as of May 10th reporting.
“The cotton (futures) market has been up and down like a yo-yo since January,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, regarding the fundamental assessment of the cotton futures market. Evans added, “If the significant lagging in planting can’t turn this market around, supply may very well be the underlying concerning issue.”
Despite the recent drop in cotton futures this month, the trend remains up in my study. I would think support for cotton futures should be near-by.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
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